PETALING JAYA: CCK Consolidated Bhd’s near-term earnings are expected to remain under pressure as the full impact of the Cikupa plant fire flows through its Indonesian manufacturing operations.
The company’s longer-term growth outlook, however, is expected to remain intact, with the upcoming Boyolali facility providing additional capacity to support expansion in Indonesia.
RHB Research said the immediate quarter is likely to remain challenging, as the shutdown of Cikupa will be fully reflected in CCK’s Indonesian manufacturing operations. The business had already been the main drag on second-quarter 2026 (2Q26) net profit, with revenue declining to RM42.4mil from RM55.5mil previously due to lower production volumes and the weaker Indonesian rupiah.
The research house noted that CCK’s reported earnings were significantly affected by about RM16mil in fire-related expenses. However, underlying profitability remained resilient, with core profit at RM19mil and a healthy gross profit margin of 21.9%, it said.
“Encouragingly, Pontianak is operating at full capacity, suggesting that underlying demand for CCK’s processed food products remains robust.
“Hence, we view the near-term earnings weakness as a temporary disruption rather than a deterioration in fundamentals.”
The research house noted CCK had also received about RM3.4mil in insurance proceeds, although the final recovery remained subject to assessment.
For the longer term, RHB Research remained bullish on CCK’s prospects, underpinned by its Boyolali food processing facility in Central Java, which is expected to commence operations in 4Q26.
The facility had approximately twice the capacity of Cikupa, and RHB Research saw its commissioning as more than simply a recovery catalyst.
“We see this as more than a recovery catalyst, as the larger facility should provide meaningful incremental capacity for CCK to capture growing demand and expand its processed food business in Indonesia,” it explained.
With the near-term earnings impact increasingly reflected in the share price, RHB Research expects attention to gradually shift towards Boyolali’s ramp-up and its potential contribution to 2027 earnings.
The research house maintained a “buy” call on CCK with an unchanged target price of RM1.60, based on 13 times forward price-to-earnings (P/E).
It noted CCK’s current valuation remained undemanding at 8.2 times forward P/E.
For 2Q26 ended June 30, CCK’s net profit plunged to RM5.06mil from RM17.82mil in the previous corresponding period, while revenue dipped to RM250.72mil from RM258.39mil a year earlier.
In a note on its 2Q26 financial performance to the local bourse back in August, CCK said revenue from the group’s Indonesian manufacturing operations in Pontianak and Cikupa eased to RM42.4mil in 2Q26, compared to RM55.5mil in 2Q25.
“The decline was primarily attributable to lower production volumes following the fire incident at the Cikupa manufacturing facility in May 2026, as well as the depreciation of the rupiah against the ringgit.
“Demand for the group’s in-house manufactured processed products remained robust, with the Pontianak manufacturing facility continuing to operate at full capacity to support ongoing demand.”
Going forward, the company said it expects its established retail network to continue delivering stable performance, supported by disciplined expansion plans, ongoing operational improvements, and prudent cost management initiatives.
“The group remains mindful of external headwinds, including inflationary pressures, currency volatility, geopolitical developments, and potential increases in feed and logistics costs arising from fluctuations in agricultural commodity and energy prices.”
The group further added that it will continue to strengthen manufacturing capabilities under PT Adilmart, supported by healthy demand for its in-house processed products.
